(Bloomberg) -- A major supplier of automotive seats joined the largest luxury-car maker in cutting its earnings forecasts as weak sales in the world's biggest markets darkens the outlook for the industry.
Lear Corp. warned investors Tuesday that net sales may drop to as low as $19.8 billion this year, down from an earlier projection of as much as $21.7 billion. The supplier of seats and electrical systems followed Mercedes-Benz maker Daimler AG in dialing back its earnings outlook, saying a second-half rebound in industry production volumes may no longer be in the cards.
“We now believe general macroeconomic and industry factors will continue to put pressure on sales and earnings throughout the remainder of 2019,” Ray Scott, Lear's chief executive officer, said in a statement.
Read more: Lear's ‘Eye-Popping' Guidance Cut May Be First of Many
Analysts have slashed estimates for auto sales this year in China, which is going through the first slump in a generation. Carmakers are cushioning declines in the U.S. by delivering more vehicles to rental companies and other fleet customers. More consumers have been getting priced out of the market by higher financing costs and automakers' culling of slow-selling sedans from their lineups.
“It is fair to say we don't know anyone who feared that a Lear guide down could be this bad,” Chris McNally, an analyst at Evercore ISI, wrote in a report Tuesday.
Lear shares opened down as much as 7.4%, the biggest intraday plunge since November 2016. The stock was down 2.9% to $131.30 as of 11 a.m. in New York.
--With assistance from Keith Naughton.
To contact the reporter on this story: Kyle Lahucik in Southfield at klahucik3@bloomberg.net
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Chester Dawson
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